The CAR® Residential Purchase Contract (Form RPA-CA) allows the buyer 17 days to remove most contingencies. There are many contingencies in the contract, including a Financing Contingency, an Appraisal Contingency, an Inspection Contingency, Title Report Contingency, and Disclosure Contingencies. Contingencies must be removed in writing by using the CAR® Form CR. If the buyer fails to remove all contingencies within the applicable time period, the seller may give the Buyer a Notice to Perform (Form NBP) If the Buyer fails to remove the contingency by the expiration of the time period in the Notice to Perform, the seller may cancel.
Some Realtors believe that the buyer has the absolute right to cancel within the 17 day contingency removal period for any reason, and get their deposit back. However, this is not really true. There is an implied covenant of good faith and fair dealing in every purchase contract which requires the buyer to make a good faith attempt to remove all contingencies, and any refusal to remove a contingency must be in good faith. If the seller can show that the refusal to remove a contingency is not in good faith, the buyer might be in default if he fails to perform and risks loss of the Deposit.